Noonan on Gold & Silver: Be Patient – Wait For the Market to Prove Itself

In spite of the positive change of behavior we have seen in gold and silver this past week with strong closes and increased volume – both attributes of buyers in more control than sellers – the weekly trend remains down. While we now see some steps in the right direction – a higher swing high – the market needs to prove itself and once that happens there will be ample opportunities to participate in the paper market.

By Michael Noonan (edgetraderplus.com). The article* was originally posted under the title Gold And Silver – Swiss National Bank Rally. Enough For A Change?.

Given the above introductory remarks, we advocate being patient and not being taken in by activity that may not prove sustainable…

Gold: Weekly Chart

Last week there was little reason to view the markets in a more positive vein after so many weeks and months of disappointment.

Gold: Daily Chart

The D/S bar in the chart below is where Demand easily overcame Supply, rallying on very strong volume and closing just as strongly, but what needs to happen next is forming a higher swing low after the next reaction. Ideally, the correction bars should be smaller and on decreased volume, telling us that selling is drying up. When that happens, demand takes over, once again, and price should move higher.

If the next reaction down can stay above a 50% retracement, and that level is just about where the D/S bar low is located, around the 1225 area, it will be a positive sign. These are just guidelines, to be prepared as the market unfolds in case a buying opportunity develops…

Silver: Weekly Chart

Silver’s weekly chart below is not to be ignored, regardless of sentiment. It should not be an impediment for the ongoing stacking of physical silver, for this is a great price level in which to be adding. If you were willing to buy at $25 or $30, or higher, buying at $16 and $17 has to be a gift.

Jettison the notion that your silver only has financial value relative to acquisition costs. The value of silver has been recognized for centuries as a store of value. Anyone who is disappointed that the current price of silver is lower than their purchase price has there own sense of “value” misplaced.

You see what has just been done to the crude oil market when the manipulators want to take total control. That is what central bankers have done to the gold and silver markets. No one should flog themselves for being a victim of a rigged market. It happened, and in time, there will be pay back. History is on our side for this one.

Silver: Daily Chart

Friday’s strong rally as shown in the chart below ended the week near resistance. There has been little in the way of any meaningful correction, so expecting one this week would be good for the market. What is important at this juncture is to assess the character of the next reaction lower.If it unfolds in a positive manner, as we have been describing, it may present a reasonable buying opportunity…

Conclusion

The above being said, however, regardless of any of the charts, there is nothing that dampens the message to keep on accumulating physical gold and silver. The world events are circling the drain like an unstoppable eddy. If the wealthiest of countries are accumulating gold and silver as much as possible, following their lead is a worthy mantra. Indeed, the current price of gold and silver is not as important as having and holding those proven forms of real money.

There is so much hype and cheer-leading out there amongst supposed gold & silver analysts that you probably wonder just who is worth your time to follow, if anyone. Having read and analyzed hundreds and hundreds of articles on the subject I have concluded that there is ONLY one such person. That’s Michael Noonan. Read More »

We do not engage in any “predictions” of what the market will do as it is an exercise in ego and folly, and a waste of time. One need only go back to those who are making predictions for 2015 and read what was predicted for 2014 for proof. All we can say is that little can be added to what has already been said and that is that the trend remains down in gold, and until there is evidence of a strong reversal, this market continues to move along the Right Hand Side of a weak Trading Range. Read More »

We choose to focus on the charts because a reflection of developing market activity tells the most accurate and current story. It is not a promising one heading into 2015, however, but it is reality, and to expect anything else will lead to the same disappointments of 2013 and 2014. Forget the ego-driven predictions that have all proven wrong again and again, and deal with what is – and this article deals with what is by looking at the charts. Read More »

2 comments

RE: “If you were willing to buy at $25 or $30, or higher, buying at $16 and $17 has to be a gift.”

I agree 100%, to all those that say, But you lost money having bout at $25, remember if you still hold that $25 Silver you have not lost anything, since like Real Estate the price it is sold at minus the price it was bought for determine the profit or loss of the investment.

What percentage of your portfolio is in physical PM’s?
If PM really took off increasing dramatically, what percentage of PM’s would you look back and say, I had that covered really we’ll since my portfolio now looks much better?

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